It took this nation decades to run our economy aground by following left-wing fantasies about government trickle down economics, all underpinned by bureaucrat and politician superior motives and skills. Seems so laughable now that we face generations of massive debt, along with the fact everything government tries to ‘fix’ is screwed up (outside the national defense and exploring new science and frontiers – though there are problems here as well).

The one size, one fix, one last (or one more) massive and incomprehensible bill solution is never going to work. All these behemoths do is play cover for political and partisan chicanery.

Bloomberg, Republicans Might Accept ‘Mini’ Deal on Debt Ceiling, Senate’s Cornyn Says: Sen. John Cornyn, R-Texas, told Fox News Sunday that Republicans may accept a short-term debt limit deal that only covers policy changes through the conclusion of the 2012 election: “We’ll take the savings we can get now, and we will re-litigate this as we get closer to the election,” Cornyn said.

As I said back in April, I would actually negotiate the debt ceiling every 3-6 months, taking a little more out of the bureaucracy each turn. Yes, it is would be a challenging and risky PR campaign, but I think America would embrace the debate and respect the effort.

But no matter what, these debt talks should not include long term horse trading. Either get massive cuts in the bloated bureaucracy long term or keep it all short term. We need to get out of the habit of trading bureaucratic reach in one area for cuts in another.

This will NEVER result in a smaller, leaner, more productive federal government.

A lot of people are looking for a budgetary Austerlitz – the Great Big Battle that results in the Great Big Victory. Those are scarce and hard to pull off. It’s possible to do the same thing through a campaign – lots of little victories that add up to a Great Big Victory.

My point below is about local, not federal government, but it is the kind of government waste that has driven us nuts. In fact, there could be a “smell test” for states to have locals governments pass and for feds to have state governments pass. Fail the tests and get no dough. That’s what our parents did with our allowances–if we were lucky enough to have parents who taught us responsibility.

They are tearing up the streets around here for sewers. The men are doing a good job – all contracted out – working faster than the former city crews did. Many of the streets are not well paved. We called to get the schedule for our district for water, sewer, and re-paving scheduled for the upcoming months and years. Well … bingo: There IS no such plan. The departments do NOT work together. Streets that were just re-paved are being ripped up. Other streets never get re-paved. This is like laying new carpet before painting the walls.

Stimulus bill? The website – http://www.recovery.gov – cost more than $24 million. As of today it is updated through March 31, 2011. Check it out – it’s a challenge to discover actual information. Plus, if you get your local congressman’s spreadsheet for your district, it will not be consistent with the federal records – at least that is how it is with my district. Apparently, articulation with the locals was not part of the $24 million deal. And we all know that it has now been reported it cost us over $250,000 for each stimulus-reported job. With overhead like 24 million dollar for-show-only websites, it is no wonder.

Waste, waste, waste and more waste. Working smart is hard and not a lot of people know how to do it. Many people just do not care about their groups, only about themselves — and workers protected by unions do not have the incentive to work smart for the group. You have to be an angel to do it, and the other workers will look at you funny, at the least.

Politicians–and bosses–who just “go to lunch” and make deals with peers and those “above” them and who do not look closely “down the ladder” to see how operations actually work cannot save the groups they “oversee”. When overseeing means seeing over rather than seeing down through to the level of the day to day operations – well, we are kidding ourselves about actually fixing the problem. Cuts can take place, but it is intensive, inteliigent work to find the right cuts rather than just finding them by what’s called “horse trading.”

Another good post. Watch Minnesota – the budget showdown happening there is a dress rehearsal for the big show that will begin in August. Both sides think the other will be forced to cave; whichever side wins in Minnesota is going to have the upper hand in Washington.

In both cases, Dems are holding bad cards but the GOP could still misplay their hand. So we just have to wait and see.

I’ve just gone through what I consider two absolutely *must* *read* books on the 2008 meltdown – and what I mean by “must read” is that you absolutely not comprehend, or even discuss intelligently what happened unless you read these. *Both* are important, since they cover different aspects that combined to take the financial system to the brink of collapse.

Read these, and you will see clearly how it all began and how it all came apart so quickly. It will clear anyone of the idea that this was something that just popped up at the end of a Presidential campaign; the amazing thing was that the system stayed propped up as long as it did. There’s another overall impression I was left with – I thought I was a fairly cynical guy. Now I see even I had no idea how deep the rot and corruption went.

First Book: Reckless Endangerment: This covers in detail the governmental and social policy reasons that the Mortgage market was screwed over and primed for collapse. You will learn how Fannie Mae was turned into a social welfare agency and funded by deliberately inflating prices by creating a bubble, which had to burst sooner or later. A lot more than that, of course.

Second Book: The Big Short, by Michael Lewis: This tells the story of the handful of men who saw the mortgage collapse coming and who got rich by betting against it. But it is a lot more than that; through their eyes, the author shows the incredible corruption and yes, fraud that prevailed throughout *all* of the big Wall Street firms. The amazing part isn’t that so few people saw what was coming – the truly shocking part was that this small group of iconoclasts spent *years* trying to tell this to the people who were responsible, and they were told they were crazy, they were stupid, they just didn’t understand. And then they were told to go away.

Reckless Endangerment tells you how the explosives were set under the economy. The Big Short tells you how Wall Street primed the fuse and then lit it, by using derivatives to take all the junk loans and put them on steroids through 30:1 leverage. All so that they could keep the profits rolling in.

The saddest part is that now, I can look at the news and see no end of people who should be doing 10 – 20 for concocting the greatest criminal fraud in the history of mankind – and they’re the ones who mostly are still running things today. And everyone knows it, and no one dares to do anything about it.

Yes, wws, Reckless Endangerment is fantastic. It should be sent around and passed around so everyone can read it…or buy it. And to think one of its author’s is a New Yawk Times financial reporter. Good on her!